Czech Republic
Provinces
Goods
Provinces
Goods
Digital Services
About
Goods
About
Goods
About
Digital Services
About
Digital Services
Goods
Digital Services
Goods
Digital Services
Tax rates in the Czech Republic will change on January 1, 2024. The main tax rate remains at 21%. The second reduced tax rate of 10% will be abolished, and the first reduced tax rate of 15% will be replaced by a single reduced tax rate of 12%.
VAT Standard rate
The standard VAT rate in the Czech Republic in 2024 is 21%.VAT Reduced rate
12%- Foodstuffs (excluding essential child nutrition and gluten-free food);
- Non-alcoholic beverages;
- Food service;
- Drinking water;
- Medical devices;
- Newspapers and periodicals;
- Children’s car seats;
- Some domestic passenger transport;
- Admission to cultural events, shows, and amusement parks;
- Social housing;
- Some agricultural supplies;
- Hotel accommodation;
- Admission to sporting events;
- Use of sports facilities;
- Social welfare;
- Funeral and related services;
- Medical and dental care.
VAT standard rate
The standard VAT rate in the Czech Republic in 2024 is 21%.VAT Reduced rate
The reduced rate is 10% for digital books.
VAT Standard rate
21%
VAT Reduced rate
12%
Thresholds
€10,000
Thresholds
From the 1st of July 2021, the distance selling thresholds were withdrawn and replaced by a unified threshold of €10,000 for all EU members. In other words, VAT should be charged at the VAT rate of the customer’s country of residence by companies whose annual taxable cross-border turnover is over €10,000.Deductible VAT
If goods or services were used to make taxable supplies in Czech, VAT in input invoices might be credited. Examples include:- VAT paid at custom clearance with your EORI number;
- VAT paid to Czech suppliers.
Registration procedure
The taxable person that does not have a registered office in this country and fulfills conditions for compulsory registration is obliged to submit an application for registration within 15 days from the day when this person became a payer or an identified person.The day when this taxable person becomes a payer is usually the day:
- When the first taxable transaction with the place of supply in this country takes place, this includes also transactions under the distance sale scheme;
- The day of the first delivery of goods from this country to another Member State.
Compulsory annexes for non-established taxable persons are:
- VAT (or similar tax) registration certificate from another country;
- Trade license/certificate or other authorization to business activity;
- Business register statement;
- If the company is appointing a local tax agent or Fiscal Representative, then a Letter of Authority or Power of Attorney is.
Tax representative
There is no need for non-EU businesses to appoint fiscal representatives in order to handle all formalities related to VAT registration and filling.Keeping records
Payers or identified persons are obliged to keep all data relating to their tax liabilities in records for VAT purposes and must do so in the structure required for drawing up a tax return, recapitulative statement, or control statement.VAT payment date
The tax is due on the last day of the deadline set out for the submission of a regular VAT return.Filing VAT returns
Deadline: no later than the 25th day after the end of the tax period, which is:- Calendar month – basic tax period;
- Calendar quarter – only a VAT payer (not an identified person) can decide that his.
Thresholds
Companies incorporated or having a permanent establishment in the EU can use the rules for low annual turnovers. In this case, the threshold is €10,000. Companies established outside the European Union cannot benefit from the intra-EU threshold. The threshold for registration for companies outside of the EU is zero. It means that they are obliged to register from the first sale. Such businesses may register for non-Union OSS instead of registration in Belgium. The threshold for VAT registration for local businesses is CZK 258,000 (€10,800).Pieces of evidence
There is a list of basic criteria to determine the location of the buyer. It is extremely important for determining tax obligations.- Customer’s permanent address;
- Billing address (bank or electronic payment operator);
- Internet Protocol (IP) address;
- Telephone number;
- The location of the customer’s fixed landline through which the service is supplied to him;
- Other commercially relevant information.
E-services list
A digital product is any product that is stored, delivered, and used in an electronic format. A customer can receive these goods or services by e-mail, downloading them from the Internet, or logging into a website. In particular, the law names the following as digital services:- Electronic books, images, movies, and videos, whether buying a copy from Shopify or using a service (for example, Amazon Prime). In tax materials, these products are referred to as “Audio, visual or audiovisual products”;
- Downloadable and streaming music, whether buying an MP3 or using music services;
- Cloud-based software and as-a-Service products (SaaS, PaaS, IaaS);
- Websites, site hosting services, and Internet service providers;
- Online ads and affiliate marketing.
Registration procedure
To register, you need to fill out a registration application. To do this, you will need the following information about the company:- Full information about the company:
- Company’s name, a trading name of the company (If applicable), full postal address, email address and website of the taxable person, name and phone number of the contact person;
- National tax number (If applicable);
- Country in which the taxable person has his place of business;
- International bank account number or OBAN number and BIC;
- An electronic declaration that the taxable person is not registered for VAT within the Union;
- Date of commencement of using the scheme.
Tax representative
Sellers selling digital services are not obligated to appoint a tax representative in the Czech Republic.Keeping records
The retention period of Tax documents for VAT is 10 years – the tax authorities have the right to request them.Filling VAT returns
The standard reporting period in the Czech Republic is a month. Legal persons have to submit the VAT Control Statement no later than the 25th day after the end of each month. For example, the VAT return for February must be submitted by 25 March at the latest.VAT payment date
The deadline for payments is the 25th of the month following the reporting month.
Subscribe to the newsletter
No spam, only interesting news